Correlation Between Denbury Resources and Cabot Oil
Can any of the company-specific risk be diversified away by investing in both Denbury Resources and Cabot Oil at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Denbury Resources and Cabot Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Denbury Resources and Cabot Oil Gas, you can compare the effects of market volatilities on Denbury Resources and Cabot Oil and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Denbury Resources with a short position of Cabot Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denbury Resources and Cabot Oil.
Diversification Opportunities for Denbury Resources and Cabot Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Denbury and Cabot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Denbury Resources and Cabot Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot Oil Gas and Denbury Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Denbury Resources are associated (or correlated) with Cabot Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot Oil Gas has no effect on the direction of Denbury Resources i.e., Denbury Resources and Cabot Oil go up and down completely randomly.
Pair Corralation between Denbury Resources and Cabot Oil
If you would invest (100.00) in Cabot Oil Gas on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Cabot Oil Gas or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Denbury Resources vs. Cabot Oil Gas
Performance |
| Timeline |
| Denbury Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cabot Oil Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Denbury Resources and Cabot Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Denbury Resources and Cabot Oil
The main advantage of trading using opposite Denbury Resources and Cabot Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Denbury Resources position performs unexpectedly, Cabot Oil can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cabot Oil will offset losses from the drop in Cabot Oil's long position.| Denbury Resources vs. Yips Chemical Holdings | Denbury Resources vs. NL Industries | Denbury Resources vs. Westrock Coffee | Denbury Resources vs. Luxfer Holdings PLC |
| Cabot Oil vs. Topbuild Corp | Cabot Oil vs. Parker Hannifin | Cabot Oil vs. Newpark Resources | Cabot Oil vs. MYR Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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